Portfolio Assessment

Client: A global automotive system supplier

A multibillion dollar, global company was in the process of spinning off their vertically integrated component operations. The spin-off had primarily provided systems and parts to the parent and had little business with other companies. Its product portfolio was designed to meet the specific needs of the parent. When it became an independent company, it was necessary to capture a significant share of business from other companies. A complete evaluation of all product lines was needed.

DAI designed and conducted a product portfolio analysis in which each line of business was analyzed for its economic health, competitiveness, growth potential, and fit with the overall business strategy. The DAI Decision Matrix Analysis tool set was applied to the entire portfolio, and a macro analysis of the market situation and competitive position for each product line was conducted. Competence strengths and gaps were also determined.

Each product line was slotted into one of four categories: emphasize, maintain, de-emphasize, or divest. The senior leadership team of the spin-off reviewed the overall business strategy, and used the portfolio assessment to make final decisions concerning their focus for growth along with which lines of business would be divested. R&D spending was realigned consistent with the new portfolio direction. Areas of primary focus were determined and actions consistent with the new direction were inaugurated.